Pulmonary fibrosis is characterized by inflammation, genesis of myofibroblasts, and abnormal tissue repair. Despite extensive research, its pathogenesis remains incompletely understood. Previously, the transcription factor CCAAT/enhancer binding protein β (C/EBPβ) was found to be a key regulator of myofibroblast differentiation in vitro, and to be involved in the acute phase and inflammatory responses. In an attempt to test the role of C/EBPβ in the development of pulmonary fibrosis, experiments using C/EBPβ null mice and their wild-type littermates were conducted. Our findings indicated that, compared to wild-type mice, animals deficient in C/EBPβ showed significantly reduced fibrotic lesions and collagen deposition in the lung upon endotracheal injection of bleomycin. Further studies on the mechanisms by which C/EBPβ regulates fibrosis indicated that knockout of C/EBPβ attenuates inflammatory cytokine expression in bleomycin-treated mice. The reduced α-smooth muscle actin gene expression in either isolated lung fibroblasts or lung tissue from bleomycin or saline-treated C/EBPβ deficient mice suggests that C/EBPβ regulates myofibroblast differentiation during fibrosis. Consistent with this finding, cells from C/EBPβ deficient mice exhibited higher proliferative rates than those from wild-type mice. These data suggest that C/EBPβ plays an essential role in pulmonary fibrosis and that this role appears to be multifactorial with respect to cytokine expression, cell differentiation, and proliferation. Copyright © 2006 Pathological Society of Great Britain and Ireland. Published by John Wiley & Sons, Ltd.